Pricing of Warehouse Transfers

Accolent ERP allows for internal Warehouse Transfers between warehouses. To initiate a Warehouse Transfer, the Receiving Warehouse creates a Warehouse Transfer Request (WTR). The WTR will initially be created based on the Alternate Cost of the Receiving Warehouse. When submitted, the WTR will automatically create a Warehouse Transfer Sales (WTS) order on the Sending Warehouse with price and cost equal to the price specified on the corresponding WTR. When the WTS order is invoiced, the price on the WTS invoice will be updated to the then Average Cost on the Sending Warehouse. The prices on the WTR will be automatically updated to the price on the WTS. Then when the WTR is Received, it will update Average Cost on the Receiving Warehouse accordingly.

Product Costs

  • Any product can and typically will have different costs on each warehouse.

Alternate Cost

Average Cost

  • For Warehouse 1 (Sending Warehouse).

  • For Warehouse 4 (Receiving Warehouse).

Create WTR

  • Create WTR1394 to send goods from Warehouse 1 to Warehouse 4.
  • The price on WTR is the Alternate Cost on the Receiving Warehouse (i.e., $18.00/EA).
  • Total extended price is $1,440.00.
  • When complete, submit WTR1394.

Creates WTS Sales Order on Sending Warehouse

  • Submitting WTR1394 automatically creates WTS1394 on the Sending Warehouse shown on the List Orders screen.
  • The price on the WTS1394 order is taken from the WTR1394 (i.e., $18.00/EA).
  • Total extended price on WTS1394 is $1,440.00.

  • As WTS1394 is then fulfilled then invoiced.
  • When invoiced, WTS1394 is automatically adjusted to set price and cost equal to the Average Cost of the Sending warehouse (i.e. $18.70488/EA)
  • The Average Cost on the Sending Warehouse is unchanged.

  • The total extended price and cost of WTS1394 is $1496.39.

Receive WTR

  • When WTS1394 is invoiced, WTR1394 can be received.
  • The price on WTR1394 will be automatically updated to the price of WTS1394 (i.e., $18.70488/EA).
  • The total extended price on WTR1394 is now $1496.39.

  • When WTR1394 is received it will change the Average Cost on the Receiving Warehouse to: {($18.80991 x 359) + 1496.39040} / 439 = 18.79077.

Overall Effect

  • The overall effect is to ship goods from the Sending Warehouse on WTS1394 with price and cost of $18.70488/EA and total extended price and cost of $1,496.39.
  • No margin is created in the Sending Warehouse by WTS1394 since price and cost are the same.
  • There is no change in the Average Cost of the Sending Warehouse.
  • The Sending Warehouse will Debit Warehouse Transfers for $1496.39 and credit Inventory for 1,496.39.
  • Goods are received in the Receiving Warehouse at a price of $18.70488/EA and extended price of $1,496.30.
  • Costs on the Receiving Warehouse will be increased by $18.70488/EA and an extended cost of $1496.39.
  • There is no margin created on the Receiving Warehouse since the price and cost of the goods received are the same.
  • There will be a change in the Average Cost of the Receiving Warehouse.
  • The Receiving Warehouse will Debit Inventory for $1496.39 and credit Warehouse Transfers for 1,496.39.
  • Assuming no shrinkage of the goods during the warehouse transfer, the Warehouse Transfers GL Accounts for Sending and Receiving Warehouses will tie-out and will be eliminated in the consolidation.
  • There will be no intra-company margin created through warehouse transfers.

 

 

 

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